The effectiveness of internal audit functions and their impact on the performance of external and internal auditors

Mohammed Yahya Abdullah Aleryani * and Anand Choudhary

Department of commerce, Dr. Babasaheb Ambedkar Marathwada University, Chhatrapati Sambhajinagar, Maharashtra, India.
 
Research Article
International Journal of Science and Research Archive, 2023, 10(01), 1020–1028.
Article DOI: 10.30574/ijsra.2023.10.1.0864
Publication history: 
Received on 19 September 2023; revised on 25 October 2023; accepted on 28 October 2023
 
Abstract: 
This study explores the relationship between the internal audit function's efficiency and the degree to which external auditors rely on its output. To gather data, a sample of 70 senior external auditors of publicly traded companies in the Republic of Yemen was chosen on purpose. Data was gathered via a questionnaire, and least partial structural equation modeling was utilized to evaluate it. The outcome shown that the degree to which external auditors rely on the work of the internal audit function is significantly positively impacted by the efficiency of the internal audit function. According to the audit risk model, this argues that external auditors should modify their audit efforts in reaction to the internal audit function's efficacy. The effectiveness and adoption of the internal audit function, as a result, adds a new dimension to the audit risk model. By acknowledging the impact of internal audit operations on external audits, the research has practical implications for customers and external auditors aiming to acquire a cost-effective audit of financial statements.
 
Keywords: 
Model for Audit Risk; Efficacy of the internal audit function; Reliance on external auditors; Auditing efforts by external auditors
 
Full text article in PDF: 
 
Copyright information: 

Copyright © 2023 Author(s) retain the copyright of this article. This article is published under the terms of the Creative Commons Attribution Liscense 4.0